Milwaukee now must maintain police and firefighters or risk millions of dollars. Here's why that poses a big challenge.

Under Wisconsin’s new local government funding law, the cash-strapped City of Milwaukee stands to lose tens of millions of dollars in state aid if it cannot maintain police and fire department staffing levels — a requirement that comes at a time of a nationwide worker shortage in both fields.

There are those who are happy to see state law forcing local governments across Wisconsin to stop shrinking their public safety agencies. But at the same time, they agree the law creates high stakes, especially for the Milwaukee Police Department, which in general faces stronger headwinds in recruiting and retention, especially with suburban competitors.

“I would concede that it will be a challenge, but I think it’s one for the benefit of the public and the officers that work in our state,” said Jim Palmer, executive director of the Wisconsin Professional Police Association.

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Exactly how Milwaukee will ensure it has the required staffing in place remains to be seen.

Milwaukee Ald. Scott Spiker, the chair of the council's Public Safety and Health Committee, worried about the law's requirements, considering the worker shortage facing police in particular and the “significant financial penalty” for not filling positions.

"We have to be super attentive to this because budgetarily it will make a huge difference," he said.

The law was agreed upon by Republicans in control of the state Legislature and Democratic Gov. Tony Evers.

Here’s what to know about the law, the money at stake and the challenges facing recruiting and retention efforts for police and firefighters.

How much funding does Milwaukee stand to gain if it can meet police and fire staffing benchmarks?

There are two aspects of the law to consider — state aid known as shared revenue and the opportunity to create a sales tax in Milwaukee.

The law boosts the shared revenue the city receives by about $21.7 million in 2024 — for an expected total of $239.2 million. That increase in shared revenue must be used for law enforcement, fire protection, emergency medical services, emergency response communications, public works, courts and transportation, except for administrative services, the law states.

The law also requires Milwaukee to at minimum maintain the number of police officers and the daily staffing level in the fire department at the numbers from the previous year, excluding any who are in state- or grant-funded positions.

Importantly, those positions must be filled, not just budgeted.

Jerry Deschane, executive director of the League of Wisconsin Municipalities, said his group requested that police and fire department staffing provisions in the law be based on budgeted positions because of the challenges with ensuring actual staffing remains the same from year to year.

"It’s a tough personnel market out there," Deschane said. "It’s not always easy or in some cases not always possible to hire as many positions as you’ve budgeted for, and frankly, that applies in all areas of local government service, not just police and fire."

More: Sales tax could help Milwaukee but new state law also comes with steep costs. Here's how.

The law also allows Milwaukee to institute a 2% sales tax, which the state estimates could bring in about $193.6 million in additional revenue the first year.

Two-thirds of the Common Council, or 10 of the 15 members, must vote in favor of the city sales tax for it to be implemented. The council is expected to vote on the tax at its Tuesday meeting.

If implemented, the sales tax revenue would have to be used for Milwaukee’s escalating pension payments and to maintain and, over a decade, build up the city's police and fire department staffing to state-imposed levels. The city must have at least 1,725 officers, including 175 detectives, and a daily staffing level of at least 218 members in the fire department by the end of the 10th year after a sales tax goes into effect.

That means the city would have to add about 100 new police officers and 90 new firefighters over the 10-year period, Fire and Police Commission Executive Director Leon Todd wrote in a June 22 memo. He wrote that he believes the city can meet those benchmarks.

How much does Milwaukee stand to lose if it can’t fill those positions?

If the city does not maintain its police and fire services, and verify to the state that it has done so, it would lose 15% of its shared revenue in the next year.

Based on the total shared revenue the city expects to receive in 2024, the loss would total about $36 million, according to city officials.

And, if Milwaukee leaders impose a sales tax, its collection could be jeopardized if the city does not meet the law's requirements to maintain and ultimately increase police and fire staffing, Milwaukee Budget Director Nik Kovac recently told a council committee.

Milwaukee desperately needs the additional revenue from the sales tax and the new shared revenue.

The city has struggled financially because the state has returned a stagnant amount of shared revenue to Milwaukee for more than two decades and limits local governments' ability to raise revenue through other means such as sales taxes or by boosting property taxes. At the same time, the city's annual pension contribution is spiking while other costs are rising and reserves are dwindling, including the nearly $400 million Milwaukee received in federal pandemic aid.

But even as the law offers Milwaukee a financial lifeline, it comes with a significant increase in costs in the city's pension and public safety.

The new structure comes with risks, Kovac recently told the council committee.

"All we can do is use the best estimates we have and based on the best estimates we have, we think this year and for several years in the future it all works," Kovac told the Steering and Rules Committee June 26. "But, yes, if all the projections break bad and pension costs are higher than we thought and the sales tax collections are lower than we thought, we will have a problem."

How bad is the worker shortage for police?

Milwaukee police officials first began reporting a general rise in resignations and retirements in 2020, with reports of recruiting issues coming soon after. The situation hit a peak between 2021 and 2022, when the number of unfilled police officer positions more than quadrupled, creating 51 vacancies.

Similar shortages are happening around the country, with a "historic low" of police staffing in Wisconsin, Palmer said. Two recent national surveys also found a 5% dip in staffing across the country over the last three years, while a majority of police agencies reported they had difficulty recruiting qualified candidates and had too few applicants.

Many explanations have been provided, including the increased scrutiny on police since the murder of George Floyd, generational differences with younger workers who prioritize a better work-life balance and long, bureaucratic hiring processes.

Although she acknowledged applicants for the department have continued to dwindle, the recent increase in vacancies does not worry Milwaukee's Assistant Chief Nicole Waldner, who heads the department's administration bureau.

She called the 2021 to 2022 increase in vacancies an anomaly, arguing that many officers felt compelled to leave after an arduous 2020 that featured civil unrest, extensive planning for the Democratic National Convention and a rise in violent crime.

Since that time, Waldner said, the department has added another recruiter to its staff and the Fire and Police Commission, which assists with recruiting, now accepts applications year-round.

"We are now just slowly getting our way back up," Waldner said. "I think (staffing) will go back up. I'm not really worried about it."

The competition between suburban departments is particularly heated in the Milwaukee area, where more than two dozen agencies closely neighbor each other. Palmer said the suburbs have “definitely” been winning the war over workers recently.

As recently as May, the Wauwatosa Police Department was offering $5,000 signing bonuses to any officer who transferred to the department.

Waldner ruled out measures like signing bonuses in Milwaukee, but she argued that her department is not so often in competition for the same officers as suburban agencies. Milwaukee's big, diverse, urban community, and the department's wide range of specialties attracts different candidates and, in particular, Milwaukee natives, she said.

And Andrew Wagner, the president of the Milwaukee Police Association, said the law means Milwaukee will have to keep pace with other cities as far as pay and conditions of work.

"It's definitely going to be a benefit to the officers that are on the job now and the officers coming in," he said.

How bad is the worker shortage for firefighters?

It's not as bad as it is for police.

A statewide and nationwide shortage of firefighters has mostly hampered volunteer fire departments. Milwaukee Fire Chief Aaron Lipski said the number of applicants the department receives has modestly decreased. With Milwaukee now forced to stop cutting its fire department — it has closed 20% of its fire stations since 2018 — Lipski expects enough recruits will answer the call.

“We still have enough interest in the fire service, it’s not as if we’re coming up goose eggs,” he said.

Even so, resignations have sharply increased since last year, according to Lipski. From 2000 to 2021, he said his department saw 31 people resign, not including retirements.

From 2022 to early July 2023, the department saw 24 resignations, with most leaving for smaller departments in the quieter suburbs, Lipski said.

Cuts to the department over the years have meant a higher workload for those who remain, creating a quality-of-life issue as they are mandated to work additional 24-hour shifts and miss important events in their private lives, said Eric Daun, president of the Milwaukee Professional Fire Fighters Association Local 215.

What do officials think of the law’s structure?

It depends on who you ask.

Ed Fallone, the chair of the Fire and Police Commission, slammed the new law as putting up obstacles to actually improving public safety staffing in Milwaukee while propping up the city's pension system, where fire and police sworn personnel make up about 80% of the city's total pension costs.

"To micromanage and dictate force levels is counterproductive when ... the entire salary structure is out of whack," Fallone said. "An important part of recruitment and retention is adjusting the salary structure across the board, which may not increase the total number of officers as much as has been dictated because you're increasing salaries."

Those who work in policing and firefighting acknowledged the challenges of filling the positions but said they still support the legislation for directing resources to the struggling fields. They cite polling showing that residents generally favor having more police officers and are frustrated with call response times.

“We want to make sure the money gets where, generally, the people want it to get, public safety just being a core local service,” Palmer said. “This will result in an influx of new dollars.”

Alison Dirr can be reached at adirr@jrn.com. Elliot Hughes can be reached at elliot.hughes@jrn.com.

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This article originally appeared on Milwaukee Journal Sentinel: Milwaukee to lose millions of dollars if it loses police, firefighters